Loan limit to a single borrower

CIRCULAR NO. 393 Series of 2003

Pursuant to Monetary Board Resolution No. 890 dated June 26, 2003, the first paragraph of Section X303 of the Manual of Regulations for Banks and for Non-bank Financial Institutions is hereby amended as follows:

Section X303   Loan Limit to a Single Borrower  The total liabilities of any person, company, corporation or firm, to a bank for money borrowed, excluding (a) loans secured by obligations of the BSP or of the Philippine Government; (b) loans fully guaranteed by the government as to the payment of principal and interest; (c) loans fully secured by US Treasury Notes and other securities issued by central government and central banks of foreign countries with the highest credit quality given by any two internationally accepted rating agencies; (d) loans to the extent covered by the hold-out on or assignment of, deposits maintained in the lending bank and held in the Philippines; (e) loans and acceptances under letters of credit to the extent covered by margin deposits; and (f) other loans or credits which the Monetary Board may, from time to time, specify as non-risk assets, shall at no time exceed twenty five percent (25%) of the unimpaired capital and surplus of the bank.

This Circular shall take effect immediately.

FOR THE MONETARY BOARD:

RAFAEL B. BUENAVENTURA Governor